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Building retail resilience: Why employee experience is a commercial strategy

Retail success hinges on employee experience: focus on career growth, fair pay, workload, and clear communication to boost engagement, retention, and resilience.

27/04/2026 · 4 minute read

Retail workforce strategy: the challenge retail leaders cannot ignore

Retail organisations have made significant progress in navigating labour shortages over the past few years, yet a deeper workforce challenge remains. 79% of retail CEOs believe their organisations are effectively managing sector-wide labour shortages. But only 55% of HR leaders share that confidence. This gap reflects a broader issue. Many retail organisations underestimate the structural barriers affecting engagement, employee retention, and workforce resilience. 

The disconnect extends beyond labour supply. Mercer’s 2025 Global Talent Trends research shows that only 32% of retail HR leaders feel confident their organisation is doing enough to build risk awareness into retail workforce management decisions. And the same proportion believe talent decisions are sufficiently informed by objective data. 

For executive teams, this highlights an important reality. Workforce challenges in retail are no longer simply about hiring. They are increasingly about how work is designed, supported, and experienced by employees across the organisation.

Why employee experience is a commercial priority

In retail environments, employee experience is closely linked to business performance. Frontline retail staff shape customer interactions, influence purchasing decisions, and ultimately determine whether customers return. Evidence consistently shows that stores with engaged employees typically report stronger customer satisfaction and improved sales conversion. This reinforces the connection between workforce experience, employee wellbeing and commercial outcomes. 

However, Mercer’s Inside Employees’ Minds research reveals a concerning trend: lower retail employee engagement levels than the average UK worker. 

Addressing labour shortages therefore requires more than recruitment alone. Retailers that want to stabilise and strengthen their workforce must focus on creating everyday employee experiences that encourage people to stay, grow, and perform at their best.

Retail’s structural engagement challenge 

Insights from Mercer’s engagement database* highlight an important nuance for HR and retail business leaders. That is, engagement challenges in retail are often structural rather than cultural. 

Most retail employees report:

  • positive relationships with store managers and colleagues; 
  • strong team dynamics;
  • and inclusive work environments.

These findings suggest that many organisations have built supportive cultures and effective frontline leadership. 

Where employee satisfaction begins to decline is in the structural aspects of work, including: 

  • Career growth/progression and internal mobility 
  • Perceptions of pay fairness 
  • Staffing levels and workload pressures 
  • Access to the tools and resources needed to perform effectively 

Fewer than half of retail employees believe their career development opportunities are promising within their current organisation, or that staffing levels are sufficient to support long-term success. 

This distinction is critical. Engagement challenges are often attributed to leadership behaviour or organisational culture. But for retail, the evidence suggests the root cause lies in how work itself is designed. 

Retail organisations already perform well on many of the human elements of work. The opportunity now is to complement these strengths with:

  • clearer career pathways;
  • transparent reward strategies;
  • and more sustainable workforce planning.

When employees can see how they will grow, understand how their contributions are valued, and feel confident that the organisation is investing in its future, engagement, job satisfaction and staff retention tend to follow.

Supporting workforce confidence during transformation

The structural nature of engagement challenges becomes even more important as retailers accelerate digital transformation. 

Across the retail industry, organisations are investing in automation, AI-enabled tools, and new technologies designed to improve efficiency and enhance customer experiences. However, employees often lack clarity on how these changes will reshape their roles or what skills they will need to succeed in the future. 

Without clear communication and visible investment in workforce development, transformation initiatives risk increasing uncertainty rather than strengthening organisational capability. 

Senior HR leaders therefore play a critical role in ensuring that technology strategies are matched with workforce strategies. Building confidence in transformation requires: 

  • Clear communication about how roles may evolve 
  • Visible leadership commitment to reskilling and development 
  • Accessible training opportunities for frontline employees 

When employees understand how change will affect them and see a path to future opportunities, they are far more likely to embrace transformation rather than resist it. This contributes to a more productive workforce.

Listening at scale: Using employee data to strengthen the retail employee value proposition

To prioritise employee experience investments effectively, retail organisations must also strengthen how they listen to their workforce. 

Combining engagement surveys, employee lifecycle listening, and external sentiment analysis enables organisations to build a clearer, evidence-based understanding of where employee needs are being met and where gaps remain. 

Advanced listening approaches, such as Mercer’s AI-enabled analysis of employee feedback and external employer reputation data, allow leaders to identify the experiences that most strongly influence attraction, engagement, and retention. 

These insights help organisations move beyond broad workforce initiatives and instead make targeted investments in the moments that matter most.  

Turning workforce insight into competitive advantage

For executive teams, solving retail workforce challenges is not simply a hiring issue. It is a broader agenda that spans employee experience, capability building, and the future of work. 

Retail organisations can be better positioned to attract scarce top talent and retain high performers by:

  • systematically identifying unmet employee needs;
  • redesigning structural aspects of work;
  • making data-driven investment decisions.

The retail sector remains a people-powered industry. The organisations that treat employee experience as a strategic business lever, rather than solely an HR initiative, will be the ones that convert today’s labour pressures into long-term competitive advantage.

*Data from Mercer’s engagement database including responses from over 900,000 employees across 46 organisations. 

Our people

Kelvyn Sampson

Kelvyn Sampson

Marsh UK Industries - UK Retail, Leisure and Hospitality Industries Leader

  • United Kingdom

Leigh Stanger

Leigh Stanger

Retail Industry Leader, Mercer

  • United Kingdom

Rebecca Harrop

Rebecca Harrop

Senior Consultant, Mercer

  • United Kingdom

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